e-Invoice penalties in Malaysia: what non-compliance actually costs
Written by the Lejar team
Malaysia's e-Invoice penalty sits in the Income Tax Act 1967, not a separate e-invoice law, and a lot of the figures repeated online for it are wrong. This guide states only what is verified against LHDN's General FAQ (Q33) and the Specific Guideline v4.7 (20 April 2026), current as of 4 July 2026.
The fine: Section 120(1)(d) of the Income Tax Act 1967
Failing to issue an e-invoice when required is an offence under Section 120(1)(d) of the Income Tax Act 1967. The penalty is a fine of RM200 to RM20,000, imprisonment of up to 6 months, or both, and it applies per instance of non-compliance, not once per audit or once per year (LHDN General FAQ Q33).
Where the duty comes from: Section 82C
The underlying duty to issue an e-invoice is set out in Section 82C of the Income Tax Act 1967. This guide cites Section 82C as a single reference rather than breaking it into sub-sections, since that level of detail is outside what we have verified.
No penalty during the relaxation period, if the conditions are met
During your revenue band's relaxation period, LHDN does not apply Section 120 penalties provided the consolidated e-invoice conditions in Specific Guideline v4.7 section 16.2 are met: one consolidated e-invoice covering everything, with any description text. See our e-Invoice deadlines guide for the relaxation period by revenue band, including the 31 December 2027 end date for businesses up to RM5 million.
Enforcement is real: the numbers behind it
LHDN reports more than 200,000 taxpayers on the e-Invoice system, with more than 1 billion transactions processed as of February 2026, and it has used e-Invoice data to detect RM1.4 billion in unreported income (LHDN news-article index, February 2026). The relaxation period is a grace period on the mechanics, not a sign that non-compliance goes unnoticed.
What this guide does not confirm
- A fine of RM50,000 and up to 3 years imprisonment for e-invoice non-compliance. This figure circulates online but is not the verified Section 120(1)(d) penalty, which is RM200 to RM20,000 and up to 6 months.
- A separate RM30,000 fine and 2 years imprisonment specifically for an SST invoice offence. We could not verify this figure against a primary source, so it does not appear as fact anywhere in this guide.
- A RM300 to RM10,000 penalty tied to numbered receipts. This claim is unverified against a primary source and is not repeated here as fact.
Frequently asked questions
How much is the fine for not issuing an e-invoice?
RM200 to RM20,000, imprisonment of up to 6 months, or both, under Section 120(1)(d) of the Income Tax Act 1967.
Is the penalty per invoice or per audit?
Per instance of non-compliance, meaning each missing or wrongly issued e-invoice is its own instance under Section 120(1)(d), not a single fine per audit.
Can I be penalised during the relaxation period?
Not for the consolidated e-invoice mechanics, as long as you meet the conditions in Specific Guideline v4.7 section 16.2: one consolidated e-invoice covering everything, with any description text. Outside those conditions, or once your relaxation period ends, the normal Section 120(1)(d) penalty applies.
Who enforces e-invoice compliance?
LHDN, the Inland Revenue Board, the same authority that runs the MyInvois system and administers the Income Tax Act 1967.